Following providers making “sizeable” cuts to fixed interest rates in recent weeks, Martin Lewis is urging savers to hold off securing a deal now as even better rates are “likely” to hit the market in days.
Posting to his 2.5 million followers on X, previously known as Twitter, the Money Saving Expert founder said: “A thought for savers. Short Version: Hold a couple of days before putting any money in fixes as things may change.
“Long Version: Fixed rates are dropping at the moment (as rates aren’t expected to rise as high as previously).
“Yet there are rumours that in tomorrow’s autumn statement the Chancellor will ask govt savings institution NS&I to raise more money.
“If so it is likely to pump out table-topping fixed rates again as it did a couple of months ago. So I’d wait a couple of days before doing anything.” (sic)
NS&I, the Government-backed savings provider, was topping the table of one-year fixes week-on-week during the summer with an AER of 6.2 percent before pulling it in October when the Bank of England left the Base Rate unchanged.
According to Moneyfactscompare.co.uk research, the average one-year fixed savings bond has since fallen to 5.36 percent – the first fall since April 2021.
The average longer-term fixed bond fell for a consecutive month to 5.02 percent. These are the biggest month-on-month falls since December 2020.
Meanwhile, in the ISA market, the average one-year fix fell to 5.20 percent, marking the first fall since May 2021.
The average longer-term fixed ISA rate also dropped to 4.92 percent, falling below five percent after only two months. These represent the most significant month-on-month declines since July 2020.
Commenting on the data, Rachel Springall, finance expert at Moneyfacts, said: “Fixed bonds and ISA rates have fallen across the board, which will be disappointing news to savers. There was a clear downward trend in the fixed market as all average fixed rates fell for the first time since March 2021.
“There have been sizeable month-on-month cuts not seen since 2020 and it is the first time that the average one-year fixed bond and ISA rates have fallen in over two years.
“There are expectations for interest rates to drop in the months ahead, so fixed savings rates could fall further before the year is over.”
However, she noted: “There are still some providers enhancing their fixed rate savings deals, and challenger banks could go against the trend and increase their rates if they need to entice deposits to fund their future lending.”
Chancellor Jeremy Hunt will deliver the Autumn Statement on Wednesday, November 22.
#Martin #Lewis #urges #savers #hold #NSI #release #deal #days #Personal #Finance #Finance